ANS: FPro forma financial statements are projections of a firm's futurefinancial situation.PTS:1REF:p. 158OBJ:6-3 TYPE: D31.The Financial Plansection of a business plan should include balance sheets and income statements on an annual basis and cash flow statements on a monthly basis, all projected out 2-3 years.ANS: FThe Financial Plansection should include balance sheets, income statements, and cash flow statements on an annual basis for five years, as well as cash budgets on a monthly basis for the first year and on a quarterly basis for the second and third years.PTS:1REF:p. 158OBJ:6-3 TYPE: D32.A computer may properly be used in a new business operation but not in preparation of the business plan.ANS: FComputers can facilitate the preparation of a business plan.PTS:1REF:p. 164OBJ:6-6 TYPE: C33.With the right assistance from professional sources (e.g., attorneys, accounting firms, incubator services), the entrepreneur can avoid direct involvement in developing the business plan.ANS: FThe entrepreneur must be the primary planner because his or her ideas are essential to producing a business plan that is realistic and believable.PTS:1REF:p. 166OBJ:6-6 TYPE: C34.Incubator organizations can provide advice on structuring a new business.ANS:TPTS:1REF:p. 165OBJ:6-6 TYPE: C35.Most major accounting firms can guide the development of the written business plan.ANS:TPTS:1REF:p. 165OBJ:6-6 TYPE: C36.A business plan is used to provide a statement of goals and strategies for use by company outsiders, and aid in the development of relationships with insiders
ANS:FPTS:1REF:p. 147OBJ:6-1 TYPE: C37.An extensive business plan that is not followed is more valuable than no business plan at all.ANS:FPTS:1REF:p. 148OBJ:6-1 TYPE: C38.The executive summary is often the most important section of the business plan.ANS:TPTS:1REF:p. 153OBJ:6-3 TYPE: Ca.It identifies the nature and context of the business opportunity.b.It outlines the approaches other entrepreneurs have taken in the same industry.c.It outlines the approach the entrepreneur plans to utilize in exploiting the opportunity.d.It highlights factors that will determine whether the venture will be successful.ANS:BPTS:1REF:p. 151OBJ:6-3 TYPE: CMULTIPLE CHOICE1.Which of the following is notone of the basic objectives of the business plan?
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